Emergency Budget 2010: Share SchemesWednesday, June 23rd, 2010
Enterprise Management Incentives
Enterprise Management Incentives (EMI) is a share option scheme that provides tax and NICs advantages and is aimed at smaller, higher-risk companies to help them recruit and retain key employees. In order to qualify for EMI, a company has to meet various conditions with respect to its size, independence and trading activities. The following change to the scheme rules was originally announced in the 2009 Pre-Budget Report but did not find itself into the Finance Act 2010.
As the scheme constitutes the provision of State Aid, the UK Government obtained European Commission State Aid approval for EMI on the condition that the current rule, that requires a qualifying company’s activities to be “wholly or mainly” in the UK, be changed in relation to options granted on or after 6 April 2010 so that a company is only required to have a “permanent establishment” in the UK. Alternatively, at least one company in the group that is carrying on a “qualifying trade” within the meaning of the legislation must have a “permanent establishment” in the UK.
The measure extends the use of EMI to foreign businesses in respect of their UK operations and will be included in the Finance (No. 2) Act 2010.